Tesla (TSLA, Financial) stock popped 4.20% at 12.48pm today, after the EV giant reported Q2 deliveries of 384,122 vehicles—a 13% drop year over year, but not as steep as some of Wall Street's worst-case scenarios. Many were bracing for a decline north of 20%, so this result brought a temporary sigh of relief. Still, the company remains in a tough position heading into the second half. Analysts now expect 2025 deliveries to land around 1.66 million units, down from 1.79 million in 2024—marking what could be the second consecutive year of declines.
CEO Elon Musk had claimed in May that demand was back. But the numbers tell a different story. Tesla once again produced over 25,000 more vehicles than it delivered—mirroring Q1—and raising concerns about whether the demand rebound is as real as advertised. Meanwhile, rivals like BYD and Xiaomi are making serious inroads in China, while GM is gaining ground in the U.S. market. The much-hyped affordable EV has yet to materialize, and some analysts, like Baird's Ben Kallo, now view its delay as a major roadblock to future volume growth.
Internally, Tesla is reshuffling leadership. Musk is taking direct oversight of North American and European sales and manufacturing, following the exit of top exec Omead Afshar. Global production now falls under SVP Tom Zhu. The company also teased its long-awaited robotaxi—offering limited rides in Austin—which helped the stock rally 23% during the quarter. But execution risks remain high. Without a refreshed lineup or credible low-cost model soon, Tesla's growth story could face more pressure than the market is pricing in.
